The Ontario Government’s 2024 Fall Economic Statement (FES) has revealed that the province is in an improved fiscal position compared to earlier projections in the 2024 Budget. This is mainly due to an overall deficit that is $3 billion lower than the number initially projected by the 2024 Budget which was released earlier this year.
Unfortunately, the province has not taken this financial windfall and turned it into improved, meaningful investments that address concerns from low-income Ontarians, including the nearly one million Ontarians on social assistance.
One-time $200 “Taxpayer Rebate” — and that’s all:
Ontario’s $3 billion financial windfall is being spent on the 2024 FES’s big “surprise” – a $200 one-time “Taxpayer Rebate” for all taxpayers in the province. Additionally, families who qualify for the Canada Child Benefit for 2024 will receive an extra $200 for each eligible child under the age of 18.
As we pointed out in our initial reaction, a $200 payment to the wealthy is hardly a good use of province’s money, especially when homelessness and food insecurity rates continue to climb.
Sending a $200 rebate to millionaires and billionaires seems like a cruel joke on vulnerable Ontarians struggling in the affordability crisis. A targeted investment of the $3 billion allocated for the rebate could have made a sustainable, meaningful difference in poverty reduction. Ontario Works (OW), upon which about 473,000 most vulnerable Ontarians rely on, remains frozen to a maximum $733 a month for single individuals since 2018. Yet it would take only one-tenth (approx. $335.5 million) of the amount to index OW to inflation (using a 2018 base rate) for single individuals, who make up almost 70% of total OW cases. Unfortunately, the FES has no room to support OW recipients.
Continuation of “temporary” gas tax cut:
The economic statement’s other main affordability measure include continuation of a 5.7-cent cut to the provincial gas tax until June 30, 2025. The “temporary” cut, first introduced in July 2022, has become a somewhat permanent fixture in the provincial budget statements announced every year. Why June 30, we wonder?
Significant under-expenditure in social services:
There are no discernible changes in the budget allocation in the Statement for the Ministry of Children, Community and Social Services (MCCSS) from the 2024 Ontario Budget declared early this year. The Statement projects an expenditure of $20.0 billion in 2024–25 and $20.1 billion in 2026 to accommodate the indexation of the Ontario Disability Support Program (ODSP) rates, among others. ODSP rates, indexed to inflation since 2022, saw a 4.5% inflation-based adjustment in July 2024, raising the rate for a single person from $1,308 to $1,368.
Yet a post-budget Financial Accountability Office of Ontario (FAO) report raised considerable doubts about the government’s budget estimates, especially due to underestimated social assistance caseload projection. The report stated that the “spending plan for MCCSS is not sufficient to fund existing ministry programs and announced commitments.” The FAO projected another $0.7 billion in 2024-25 and $1.8 billion in 2026-27 needed to keep up with the need. The 2024 FES showed no signs of addressing this serious concern.
Auto insurance reform puts low-wage workers at risk:
The 2024 FES reasserts the government’s regulatory changes first announced in the 2024 budget that make statutory accident benefits (other than medical, rehabilitation, and attendant care) optional for consumers purchasing auto insurance. As we pointed out earlier this year in Policy Options, this measure is inconsiderate of the realities of low-income families and low-income workers especially.
The choice to opt out means most low-income workers who are already struggling to make both ends meet will likely choose a cheaper insurance which doesn’t include income-replacement benefits, without realizing what’s at stake in the event of a motor vehicle accident. As a result, they will have to depend on inadequate public benefits (Employment Insurance (EI) sick benefits, Canada Pension Plan Disability benefits, or social assistance) instead of more substantial insurance income-replacement benefits if they are injured in an auto accident.
Continuing with this change to regulations, without ensuring a fair and quick income replacement through auto insurance system, removes responsibility for mandatory provision of income support from insurance companies and will force the province’s low-income workers onto a path of higher risk and in danger of falling into further poverty.
Concerns on funding for the Employment Services Transformation and impacts on OW and ODSP clients:
The 2024 FES lauds the government’s $15 million investment in Better Jobs Ontario program in 2023 that supports the expansion of short-term training programs to more job seekers, including social assistance recipients, gig workers, and newcomers. Yet on the ground, we are seeing many OW and ODSP recipients experiencing cuts to the financial support they receive for transportation, which enable access to pre-employment training and classes.
The economic statement also asserts the province’s commitment to provide integrated, streamlined pre‐employment services through Employment Services Transformation or Integrated Employment Services as it is also termed. This is part of the province’s modernization of social assistance and it involves contracting out employment services for social assistance recipients to third-party private companies as service system managers (SSMs). The model has raised numerous concerns: An evaluation report of its pilot phase found that the performance-based funding model that rewards employment placement and retention has resulted in SSMs ignoring social assistance clients with barriers to and fewer chances of employment, including persons with disabilities. Another report alarmingly highlighted that the new privatization model includes less funding and subsidies to support clients than have been provided in the past.
No funds to help enforce workplace protections for workers:
The FES did not include specific income supports for low-income workers, nor did it include specific funding to better enforce labour laws. Though the province’s new Working for Workers Five Act, 2024 law includes increased fines for violations of the Employment Standards Act, 2000, the province has not earmarked funds for more proactive workplace inspections.
Passing legislation supporting workers on paper should be the starting point and not the end point. Without adequately funding enforcement efforts to improve workplace safety and workplace standards for low-wage workers who may be more at risk of repercussions, or enforcement efforts to prosecute and collect wages stolen from employees by their employers, the province has once again missed an opportunity to improve the lives of vulnerable, low-income workers.